REINVESTMENT FUND Cleveland Tax Abatement Study Development Planning Sustainability Briefing February 4, 2020 CITY OF CLEVELAND Mayor Frank C. Jackson Agenda 1. Equitable Development framework 2. Tax Abatement Study Overview 3. Key Research Findings 4. Stakeholder and Community Engagement feedback Equitable Development Taskforce  Tax policy study is part of a larger equitable community development strategy.  We are committed to understanding the potential issues associated with growth in Cleveland and develop e o e ded poli ies to e su e Cle ela d s neighborhoods meet the needs of all residents.  Diverse and inclusive mixed-income communities, with adequate housing for renters and owners who have differing income levels, will move us away from our atio s lega of housi g seg egatio a d eate the conditions for equity Study Goals and Objectives  Understand the neighborhood and economic impact of our current tax policy  Determine if tax abatement can incentivize development throughout the City and at multiple price points  Protect long time home owners from rapid property value increases Overview of Key Research Findings       Tax Abatement Locations Displacement Risk, Income & Home Values Racially and Ethnically Concentrated Areas of Poverty (RECAP) Quantitative & Economic Impact Analysis of Tax Abatement Mortgage Foreclosure Rates & Tax Abatement City Benchmarking Residential Tax Abatements Issued 2004 to 2018 Tax Abatements, 2004 – 2018 Tax Abatements were issued to 4,462 residential properties between 2004 and 2018 NOTE: Data do not indicate start date, end date, or term length for abatements. Subsidized and Abated Properties A po tio of the it s CDBG a d HOME investments support the development of affordable housing for low- and moderate-income residents. Location of Subsidized and Abated Properties by DRR Category Location of Subsidized and Abated Properties by DRR Category Subsidized Properties High Pressure Data provided by the city of Cleveland identified 3,755 unique properties that received some form of public subsidy. Among those properties 2,942 (78%) also received an abatement. Subsidized properties represented 29% of the 10,199 properties with active abatements between 2005 and 2018. Most subsidized properties were located in declining markets (74%). Steady Declining Insufficient Data Total Abated Properties Abated & Subsidized Properties 72 (2%) 1,364 (13%) 33 (1%) 713 (19%) 3,108 (30%) 583 (20%) 2,777 (74%) 5,504 (54%) 2,309 (78%) 193 (5%) 223 (2%) 17 (1%) 3,755 (100%) 10,199 (100%) 2,942 (100%) Fewer Subsidized Projects Using Tax Abatement Since 2014 Nearly One in Four Abatements Issued Between 2004 and 2018 Were For Subsidized Housing Developments Number of New Abatements Issued Each Year by Subsidy Usage, 2004 to 2018 59% 65% 71% 61% 64% 61% 54% 64% 76% 81% 77% 89% 93% 41% 35% 29% 39% 36% 39% 2006 36% 23% 7% 2007 100% 46% 11% 2005 97% 24% 19% 2004 98% 2008 2009 2010 2011 Abated Subsidized Projects 2012 2013 2014 2015 Abated Unsubsidized 2% 2016 3% 2017 0% 2018 2004 to 2008 Maps of Abatements by Start Year and by Subsidized/Not Subsidized Housing Abatements Starting Prior to 2000 Subsidized Parcels Abatements Starting 2000 to 2007 Subsidized Parcels 0 Not Subsidized Subsidized 0 Not Subsidized Subsidized Abatements Starting 2008 to 2010 Abatements Starting 2011 and Later Subsidized Parcels I Subsidized Parcels 33:22:?? 33:22:?? ,TMENT $59 FUND Abatements Most Often Used for Single Family, New Construction Most Abatements Issued for Single Family Housing Renovation Growing, but New Construction Remains Most Common Project Type Share of Abatements by Parcel Land Use, All Active Abatements, 2004 to 2018 Share of Abatements by Project Type, by Date of Abatement Issuance, 2004 to 2018 32% 53% 69% Single Family, 78% Residential Condo, 14% 68% MultiFamily, 7% 47% 31% Other, 0.70% 2004 to 2008 2009 to 2013 Renovation 2014 to 2018 New Construction Utilization of Tax Abatement Program Has Declined Abatement Usage Declining Since Peak in 2006 Number of New Abatements Issued Each Year and Total Active Abatements, 2004 to 2018 1,500 9,000 7,067 7,390 7,244 6,989 6,841 6,388 6,560 6,061 6,016 1,000 5,590 894 684 5,383 6,000 5,112 4,800 4,473 666 4,252 483 500 3,000 390 192 244 219 145 168 150 164 132 150 186 0 0 2004 2005 2006 2007 2008 2009 2010 2011 New Abatements 2012 2013 2014 Active Abatements 2015 2016 2017 2018 Small Number of High Value Abatements Represent Substantial Share of All Abated Values Growing Number of High Value Abatements Market Value of Active Abatements, 2004 to 2018 • In 2018, 6 parcels accounted for 14% of the total abated value in Cleveland Six abatements with Market Values over $10,000,000 One abatement with Market Value over $10,000,000 • The top 25 abatements in 2018 represented 25% of the total abatement value o? 0 REINVESTMENT FUND Displacement Risk Ratio Home Prices/ Median Family Income Calculating DRR Displacement Risk Ratio (DRR) Median Sales Price (Year 1 & Year 2) = Median Family Income (inflation adjusted to appropriate year) Base Median Family Income Used: 2000 Census • Cleveland City: $30,286 DRR 2004-2005 DRR Calculation for City $76,000 (Median Sales Price in 2004 & 2005) $35,132 (2000 Median Family Income, Inflation-adjusted to 2005) DRR 2008-2009 DRR Calculation for City $24,000 (Median Sales Price in 2008 & 2009) $36,069 (2000 Median Family Income, Inflation-adjusted to 2009) DRR 2017-2018 DRR Calculation for City $38,500 (Median Sales Price in 2017 & 2018) $45,732 (2000 Median Family Income, Inflation-adjusted to 2018) DRR 2017-2018 # of Block Groups High Pressure (above +3.0) 13 (3%) Steady (0 to +3.0) 161 (35%) Declining (below 0) 267 (58%) Insufficient Data Total 21 (5%) 462 (100%) Overlaying Abatement Locations and DRR 2017-RIVER RIVERSIDE HOPKINS DRAFT Nor?d EISIRIBIJTIOIJ Housing Market Types g, DRR 2017/18 I ,7 i, . - High Pressure I Steady Ix!" I I I - Declining V1. 72/ I Insuf?cient Data Overlaying Abatement Locations and Resident Income City Median Family Income In 2013-2017: $34,166 o' 0 REINVESTMENT FUND Areas of Poverty Racially/Ethnically-Concentrated Areas of Poverty, 2010 Definition: Census tracts with a non-white population that is greater than or equal to 50% and meet either of the following poverty criteria: the poverty rate of a tract is 1) higher than 40% or 2) more than three times the average poverty rate of tracts in the metropolitan area. The racial/ethnic threshold is lowered to 20% for tracts located outside of metropolitan/micropolitan areas. Defined areas are based on RF calculations using HUD definitions and publicly available ACS records. Poverty and Demographics Still Highly Correlated 45% $45,000 $40,000 $37,827 40% 35% 35% $28,273 $29,008 35% $35,000 $30,000 30% 26% $25,000 25% $20,000 20% 15% $15,000 2000 2009-2013 Median Income 2014-2018 Poverty Rate Note: Median income levels adjusted for inflation to 2018 dollars Definition: Census tracts with a non-white population that is greater than or equal to 50% and meet either of the following poverty criteria: the poverty rate of a tract is 1) higher than 40% or 2) more than three times the average poverty rate of tracts in the metropolitan area. The racial/ethnic threshold is lowered to 20% for tracts located outside of metropolitan/micropolitan areas. Defined areas are based on RF calculations using HUD definitions and publicly available ACS records. Overlaying Abatement Locations and R/ECAP Areas Definition: Census tracts with a non-white population that is greater than or equal to 50% and meet either of the following poverty criteria: the poverty rate of a tract is 1) higher than 40% or 2) more than three times the average poverty rate of tracts in the metropolitan area. The racial/ethnic threshold is lowered to 20% for tracts located outside of metropolitan/micropolitan areas. Defined areas are based on RF calculations using HUD definitions and publicly available ACS records. Mapping Price and Market Pressure - Racially and Ethnicially Nel hborhood es 9 yp Concentrated Areas of Poverty (RECAP) Declining Stable High Pressure Pressure Pressure Low Price Mid Price 75K) - . . . High Price ,x BURKE ST- - I LAKEFRONT SUP R1 . . 4? AIRPORT InsuffiCient Data v/I A m? EMONT I l: . 0 I i 93/0 ,2 . EFFER ON . 80 CKY Rim/?55! L, CLEVELAND RESERVA n'oni METRO PAR HOPKINS [5?11 I -- I PURITASI- - - LONGMEAID .1: 11.x I 14?4" Quantitative and Economic Impact Analysis of Abatements A ate e ts Represe t a Fra tio of the Cit ’s Housi g Market Abated Parcels Represent Only a Fraction of the Cit ’s Par els Most Block Groups (74%) Had 10 or Fewer Parcels Abated Between 2004 and 2008 Share of Parcels with Active Abatement, 2004 to 2018 Count of Abatements Issued in Each Block Group, 2004 to 2018 4.4% 4.0% 3.7% 4.6% 4.5% 4.3% 4.2% 4.0% Over 40, 6% 3.7% 3.4% 3.3% 3.1% 1 or Fewer, 22% 2.9% 2.7% 2.5% 11 to 40, 20% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2 to 10, 52% Market Value of Building Abatements per Year    Market value of abatements peaked in 2007 In 2012 the market value of abatements dropped, perhaps due to the triennial reevaluation reflecting reduced property values postrecession and due to fewer active abatements The market value of abatements has increased since 2016. This may be driven by the addition of higher value abatements 1,000,000,000 900,000,000 800,000,000 700,000,000 600,000,000 500,000,000 400,000,000 300,000,000 200,000,000 100,000,000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Note: Abatement values in the early years may be understated due to limited data tracking methods Assessed Building, Total, and Abated Values per Year Assessed Market Value Tax Year Taxable Building Taxable Total Abated Building 2004 10,579,586,820 13,857,778,800 550,584,700 2005 10,911,097,690 14,201,800,820 620,524,300 2006 11,438,473,136 15,438,882,386 814,567,610 2007 11,341,252,640 15,360,341,250 949,000,050 2008 11,508,909,408 15,503,558,718 922,382,190 2009 11,104,041,500 14,870,109,600 882,486,800 2010 11,331,794,450 15,093,676,600 879,750,700 2011 11,450,076,058 15,277,969,370 893,764,188 2012 9,828,434,880 13,192,446,790 747,709,000 2013 9,916,425,100 13,279,353,100 736,912,800 2014 10,077,615,150 13,443,494,200 740,855,100 2015 9,170,326,926 12,461,447,426 750,138,200 2016 9,170,220,211 12,466,791,211 824,939,400 2017 9,496,732,824 12,831,713,484 813,863,100 2018 10,359,241,990 13,976,296,816 927,294,400 Abatement Revenue Rolling Off per Year 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 School District City County Millions Cumulative Property Tax Revenue from Previously Abated Parcels 40 35 Property Tax Revenue 30 25 20 15 10 5 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 School District City County Note: P ope t ta e e ue is assu ed to e e ei ed ea h e tit o e ea afte the pa el s a ate e t is listed as e di g. The revenue calculation assumes that the collection rate is 100% and property values remain fixed at the valuation in the final year of the abatement. The millage rate is the millage rate for each entity in the roll-off year. Change in Abatement Value Change in Total Assessed Value Change Abatement Value by Neighborhood: Change in Total Value by Neighborhood: 2004 to 2018 2004 to 2018 Percent Change euro?30 ?30 to ?15 . . ~15too .- 01010 4 1D to 20 Percent Change 20 to 30 -100 40010 500 50 to 100 NA 100to115 11510 150 Change Abatement Value by Neighborhood: 2010 to 2018 Percent Change Change in Total Value by Neighborhood: 2010 to 2018 Percent Change -60 to ?30 -30to ~15 -100 100 01010 100 115 ESTMENT .- FUND Amount of Abated Property by Year and Associated Multipliers   For economic activity associated with construction, the market value of new abatements (the first year the market value of an abated property is established) is used Only the first year is calculated – otherwise there would be double counting of activity First Year of Abatement Value 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018  Count 578 684 483 894 666 390 192 244 Market Value of Abatements 67,755,300 90,924,700 89,613,160 142,139,750 69,698,840 48,956,500 22,268,800 35,453,200 219 145 168 150 164 132 150 23,794,000 18,834,100 30,202,200 38,049,100 122,173,400 44,987,000 83,257,600 RIMS II provides the following as multipliers for residential construction in the Cleveland MSA: - Output (total dollar change in all industries for each additional dollar of output): 2.0424 - Earnings (total dollar change of households employed by all industries for each additional dollar of output): 0.6694 - Jobs per $1.0 million of investment: 13.791 Multiplier Analysis: Estimated Jobs Per Year  Abated value is expressed in constant (2017) dollars.  The program peaked (in dollar value) in 2007, and the dollar value dropped precipitously during the Great Recession and its aftermath.  2016 is likely an outlier based on a handful of large projects. Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Abated Value Associated (2017 Dollars) Number of Jobs $87,920,482 1,213 $114,119,111 1,574 $108,958,223 1,503 $168,037,809 2,317 $79,351,331 1,094 $55,935,420 771 $25,032,690 345 $38,633,978 533 $25,403,039 350 $19,817,454 273 $31,271,810 431 $39,349,901 543 $124,776,127 1,721 $44,987,000 620 $83,257,600 1,148 Multiplier Analysis: Direct, Indirect and Induced Economic Activity Year 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Abated Market Value $67,755,300 $90,924,700 $89,613,160 $142,139,750 $69,698,840 $48,956,500 $22,268,800 $35,453,200 $23,794,000 $18,834,100 $30,202,200 $38,049,100 $122,173,400 $44,987,000 $83,257,600 Output $138,383,425 $185,704,607 $183,025,918 $290,306,225 $142,352,911 $99,988,756 $45,481,797 $72,409,616 $48,596,866 $38,466,766 $61,684,973 $77,711,482 $249,526,952 $91,881,449 $170,045,322 Earnings $45,355,398 $60,864,994 $59,987,049 $95,148,349 $46,656,403 $32,771,481 $14,906,735 $23,732,372 $15,927,704 $12,607,547 $20,217,353 $25,470,068 $81,782,874 $30,114,298 $55,732,637 Total Economic Impact $183,738,823 $246,569,601 $243,012,967 $385,454,574 $189,009,314 $132,760,237 $60,388,532 $96,141,988 $64,524,569 $51,074,312 $81,902,326 $103,181,549 $331,309,826 $121,995,747 $225,777,960 Source: Bureau of Economic Analysis RIMS II multipliers Abatement Program Generates Economic Output at Cost of Forgone Property Tax Revenue Forgone Abated Tax Revenue, 2004 to 2018 Estimated Economic Impact, 2017 RIMS II Multiplier Abated Value Total Final Demand Total Output 2.0424 $44,987,000 $91,881,448.80 Total Earnings 0.6694 $44,987,000 $60,114,297.80 Total Employ 13.791 $44,987,000 620.4 Jobs $6,000,000 $5,000,000 $4,000,000 $3,000,000 $122M Total Econ. Value $2,000,000 2.5% Income Tax Rate $1,000,000 $0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 $4.8M $3M Foregone Tax Revenue Annual Income Tax Revenue 0 REINVESTMENT m. FUND Home Mortgage Foreclosures Tax Abatements Tax Abatements Not Leading to Increased Foreclosures Fewer Tax Abated Properties Experienced a Foreclosure Filing While Abatements Are Active Share of Non-Abated Residential Properties and Tax Abated Properties with a Foreclosure Filing, 2006 – 2018 7% 6% 6% 5% average foreclosure rate 6% 5% 5% 4% 3% 3% 3% 4% 3% 4% 4% 4% 3% 3% 4% 4% 3% 2% 2% 4% 2% 3% 1% 3% average foreclosure rate 2006 2007 2008 2009 2010 2011 2012 Active Abatements 2013 2014 2015 2016 2017 2018 Non-Abated Foreclosure Rates Are Not Higher After Abatements End Mortgage Costs not Tax Payments Leading Cause of Financial Distress Among Abatement Holders Residential Properties with Abatements Ending Between 2005 and 2016 (n = 5,429) Residential Properties with Abatements Ending Between 2005 and 2016, By Foreclosure Type During Abatement Period Within 3-years of Abatement End 3-years After Abatement End 14% experienced a foreclosure filing 63% 8% experienced a foreclosure filing 24% 10% experienced a foreclosure filing Non-Abated Properties 84% 91% Tax Foreclosure 3% Actively Tax Abated Properties Both Foreclosure 5% Within 3-years of Abatement End Mortgage Foreclosure Most Homeowners Do Not Sell After the Abatement Term Between 2008 and 2015, 3,858 abatements ended. Among parcels with an expired abatement, 19% sold at the end or 3 years after their abatement expiration. Citywide, 48% of households have moved within the last 4 years O A erage O e i Fi e A ated Par els ill Sell ithi 3 Years of their A ate e t’s E piratio Share of Parcels with Expired Abatements That Sold Three Years After Abatement Expiration 30% 24% 25% 23% 22% 20% 20% 19% 19% 18% 17% 15% 10% 5% 5% 0% 2008 2009 2010 2011 Note: Share of households that moved within the last four years estimated from ACS, 2018. Values exclude residents in group quarters. 2012 2013 2014 2015 Avg 08 - 15 Previously abated homes represented 2% of all sales between 2008 and 2015 Program Benchmarking National Peer City Demographics       Peer cities are Atlanta, Cincinnati, Detroit, Kansas City, Pittsburgh, Richmond and St. Louis Cle ela d s 7 populatio 385,552) ranks 4 of 8 in the group – highest is Detroit (711,910), lowest is Pittsburgh (227,032) Cle ela d s o i ed a e age g o th ate -2017 is also fourth at 0.2%. Highest is Cincinnati (2.0%) and lowest is Detroit (-0.8%). Cleveland and Detroit are lowest in Median Household Income at under $28,000. Atlanta and Kansas City are highest at over $50,000. Cleveland has the highest percentage of population living in poverty (37.9%). Kansas City has the lowest (17.3%). Cleveland also has the highest unemployment rate (6.8%) and is the only peer above 5.2%. Kansas City and Richmond have the lowest rate (3.8%). Abatement Characteristics: Length of Abatement  Cle ela d s le gth of eside tial a ate e t of the peer group. 5 ea s falls ge e all i the iddle - Kansas City has the longest period, with some abatements going out 28 years. - Pittsburgh and St. Louis have the shortest period, with some abatements ending after 3 and 5 years respectively. - Three cities have a single length of abatement (Atlanta, Cleveland, Richmond)  Five cities vary their abatement length - Pittsburgh 3-10 years St. Louis 5-10 years Cincinnati 10-15 years Detroit 15-17 years Kansas City 10-28 years Abatement Characteristics: Limitations   Most cities (including Cleveland) provide 100 percent abatement throughout the length of the abatement So e stai step do the alue of the a ate e t o e ti e: ‒ Atlanta: years 1-5 abatement is 100%; years 6-7 80%; year 8 60%; year 9 40%; year 10 20% ‒ Ka sas Cit s U a De elop e t A ea a ate e ts a e up to 75% fo for 15 years   ea s, 7.5% Most ities i ludi g Cle ela d do ot e ui e a ut fo test fo eside tial abatements, the exceptions being Detroit and Kansas City (in some instances) Most cities require a minimum level of improvement, a few have caps on the maximum amount of improvements that may be abated. Place-based Abatements  All the cities have some forms of place-based abatements, either requirement that abatements be located in certain areas or weighting for certain areas - The terminology varies by city (often set by the State), and it is not always consistent - For example, what constitutes an enterprise zone in Atlanta is different than in Detroit  Many cities have multiple programs with differing eligibility and benefits - Kansas City offers residential tax abatements via four different agencies (probably not an optimal approach) - Pittsburgh implements three different residential abatement programs – two by the city and one by the county - Richmond has two different programs, one for rehabilitated structures, another for rehabilitation, conservation and rehabilitation districts Local City Benchmarking Characteristics       Suburban comparators were also chosen – Lakewood, Cleveland Heights, Euclid, Newburgh Heights, South Euclid Each offers some form of residential abatement program Two of the programs (Cleveland Heights and Newburgh Heights) commenced in 2018 and are just underway, with no information on properties abated. The length of time varies from 5 to 10 years The percent of improvements abated also varies, from 25% to 100%, and in several cities the percentage can vary from abatement to abatement Several appear to have a minimum requirement of $2,500 in improvements to be eligible for abatement Research Summary • Market is fragile – displacement pressure in just 3% of City • Still high poverty rates even in stronger markets • Higher rates of racial segregation and weaker markets than in 2004 • Recovery from great recession is slow • Low incomes are bigger issue than high home prices • Abatement distribution • 90% of abatements are single family • Abatement #s have not recovered since recession but values are higher due to more large projects • Tax abatement is more equally spread across the City today than in 2004 • More depressed areas, mostly subsidized projects and there is no correlation between abatement and improving property values • Abatements are rolling off and taxes are being added to schools, etc.; cumulative nearly $35M • No evidence of tax abatement cliff – increase of tax foreclosure or sales when abatement ends Housing Market is recovering but fragile Housing market has made strides, but recovery remains fragile. The abatement is an important, but imperfect tool to support market investment. New Housing Construction Still Lags Peer Cities Home Prices Still Recovering from Nadir in 2012 Share of Housing Units Built in 2000 or Later, ACS 2014-18 Median Sales Price, 2005 to 2018 13.89% $90,000 10,000 $80,000 9,000 8,000 $70,000 7,000 $60,000 7.40% 4.88% 4.94% 6,000 $50,000 5,000 5.38% $40,000 4,000 3.60% $30,000 3,000 $20,000 2,000 $10,000 Detroit, MI Pittsburgh, Cleveland, Cincinnati, PA OH OH St Louis, Kansas City, MO MO 1,000 $0 0 Sales Prices Sales Volume o' 0 REINVESTMENT FUND Stakeholder and Neighborhood Engagement Stakeholder Engagement • August & September – Information Gathering (GOPC) • One on one interviews with taxing entities and community housing groups • One on one interviews with financial institutions, developers, real estate agents, home builders • October – Initial research presentations (GOPC, RF) • Tax Policy Working Group • Council Caucus • ULI meeting • December & January – Round tables to test scenarios (GOPC, RF, PFM) • • • • • Tax Policy Working Group Taxing entities Real Estate Lenders & Developers Community Housing Professionals Key Takeaways from Stakeholder Engagement  Market is still fragile, especially more multifamily  Just starting to get substantial returns from program overall; just getting back to pre-recession levels; CREATE VALUE that as t the e efo e  Financial sector underwrites based on 15 year tax a ate e t; ould t le d ithout it  Ope to a ut fo test o ulti-family to confirm need  Administrative changes are sought to have taxing entities more involved as project develops  A tax abatement cap on single family is acceptable Community Engagement • Led by Neighborhood Connections • Developed a fact sheet and listening guide • Held train the trainer sessions for CDCs and other community members that want to • October thru December • 50 one on one conversations • November – December • Six east side and six west side community conversations • Draft summary of key findings expected by mid-January • Long time owner support is most critical C OF C 125-174 Ordinance No. 31-2020 AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a Tax Increment Council Members McCormack, Brancatelli Financing Agreement with Tinnerman Lofts, and Kelley (by departmental request) LLC, or its designee, to develop the former Vista Print building located at 2048 Fulton Avenue into apartment units and other amenities; to provide for payments to the Cleveland Metropolitan School District; and to declare certain improvements to real property to be a public purpose. WHEREAS, under Section 5709.41 of the Revised Code, improvements to real property may be declared to be a public purpose where fee title to the real property was, at one time, held by the City of Cleveland and the real property is then leased or conveyed by the City; and WHEREAS, the City has entered into the chain of title for the Property which is more particularly described in this ordinance (the “Real Property’) pursuant to the requirements of Section 5709.41 of the Revised Code prior to the passage of this ordinance; and WHEREAS, the Real Property is to be developed in accordance with the Cleveland 2020 Citywide Plan, a copy of which is placed in File No. _31-2020-A; and WHEREAS, under Section 5709.41 of the Revised Code, the improvements declared to be a public purpose may be exempt from real property taxation; and WHEREAS, under Section 5709.41 of the Revised Code, the owners of the improvements may be required to make annual service payments in lieu of taxes that would have been paid had the improvement not been exempt; and WHEREAS, under Section 5709.41 of the Revised Code, the exemption may exceed 75% of the improvements for up to 30 years when a portion of the service payments so collected are distributed to the Cleveland Metropolitan School District (“District”) in an amount equal to the amount the District would have received had the improvement not been exempt; and WHEREAS, the District has been notified of the intent to enter into the agreement authorized by this ordinance in compliance with Sections 5709.41(C)(4) and 5709.83 of the Revised Code; and WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore, Ordinance No. 31-2020 BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Section 1. That the improvements to be constructed by Tinnerman Lofts, LLC, or its designee, (“Redeveloper”), are declared to be a public purpose for purposes of Section 5709.41 of the Revised Code (the “Improvements”). The Real Property is more fully described as follows: Property 4: 007-05-015 Situated in the City of Cleveland, County of Cuyahoga and State of Ohio, and known as being Sublot Nos. 49 to 60 inclusive in Sargent and Dixon's Re-Subdivision of part of Original Brooklyn Township Lot No. 52, as shown by the recorded plat in Volume 2 of Maps, Page 43 of Cuyahoga County Records, and part of Sublot No. 312 in Barber and Lord's Allotment of part of Original Brooklyn Township Lots Nos. 51, 52, 69 and 70, as shown by the recorded plat in Volume 11 of Maps, Page 26 of Cuyahoga County Records and part of China Court, S.W., as vacated by City Ordinance No. 188-47 and that part of Vinton Avenue, S.W., as vacated by City Ordinance No. 1383-41 and Vinton Court, S.W., as vacated by City Ordinance No. 67842, the northerly 12 feet of Japan Court, S.W., as vacated by City Ordinance No. 1654-42 and part of Original Brooklyn Township Lot No. 52, bounded and described as follows: Beginning at a point in the southwesterly line of Fulton Road, S.W., distance North 25° 30' 00'' west, 1783/100 feet from the most easterly corner of said Sublot No. 312 in the Barber and Lord's Subdivision which point is distant 25° 30' 00'' east, 244-78/100 feet from the intersection of the southwesterly line of Fulton Road, S.W., with the southeasterly line of Lorain Avenue; Thence South 64° 30' 00'' west along the southeasterly line of Parcel No. 2 of premises conveyed to The Tinnerman Products, Inc., by deed recorded in Volume 5043, Page 628 of Cuyahoga County Records, 10600/100 feet to the most southerly corner of said Parcel No. 2; Thence South 25° 30' 00'' east parallel with the southwesterly line of Fulton Road, S.W., 17-50/100 feet to the northwesterly line of the said Sargent and Dixon's Subdivision; Thence North 64° 30' 00'' east, along the northwesterly line of said Sargent and Dixon's Subdivision, 128/100 feet to the intersection of the northeasterly line of Japan Court, S.W., vacated by the City of Cleveland by Ordinance No. 1565-42 and in the northwesterly line of said Sargent and Dixon's Subdivision; Thence South 25° 28' 20'' east, along the northeasterly line of said Japan Court, S.W., now vacated 1200/100 feet; Thence South 64° 30' 00'' west, parallel with the northwesterly line of the said Sargent and Dixon's Subdivision, 10-00/100 feet to the southwesterly line of Japan Court, S.W.; Thence South 25° 28' 20'' east, along the southwesterly line of Japan Court, S.W., 393-46/100 feet to the northwesterly line of Chatham Avenue, S.W.; Thence South 64° 30' 20'' west, along the northwesterly line of Chatham Avenue, S.W., 104-97/100 feet to the northeasterly line of West 36th Street; Thence North 25° 28' 20'' west along the northeasterly line of West 36th Street, 306-20/100 feet to the easterly line of West 37th Place; Thence North 2° 53' 40'' west along the easterly line of West 37th Place, 107-50/100 feet to the northwesterly line of said Sargent and Dixon's Subdivision which is also the northwesterly line of Vinton Court, S.W., vacated by the City of Cleveland by Ordinance No. 678-42; Thence South 64° 30' 00'' west along the northwesterly line of said Sargent and Dixon's Subdivision, 149/100 feet to the southwesterly corner of Parcel No. 3 of premises conveyed to the Tinnerman Products, Inc., by deed recorded in Volume 5043, Page 628 of Cuyahoga County Records; Thence North 2° 55' 00'' west along the westerly line of said Parcel No. 3, 121-37/100 feet to the northwesterly corner of said parcel, which point is in the southerly line of an alley described in Common Pleas Court of Cuyahoga County Case No. 34171, Volume 342, Page 296 of Common Pleas Court Records; 2 Ordinance No. 31-2020 Thence North 87° 05' 00'' east along the southerly line of said alley, 35-00/100 feet to the northeasterly corner of said Parcel No. 3, conveyed to the Tinnerman Products, Inc., as aforesaid; Thence South 14° 38' 10'' east along the northeasterly line of said Parcel No. 3, 4-02/100 feet to the northwesterly line of Parcel No. 1 of premises conveyed to the Tinnerman Products, Inc., by deed recorded in Volume 5043, Page 628 of Cuyahoga County Records; Thence North 64° 30' 00'' east along the northwesterly line of said Parcel No. 1, 101-74/100 feet to the southwesterly line of Fulton Road, S.W.; Thence South 25° 30' 00'' east along the southwesterly line of Fulton Road, S.W., 77-17/100 feet to the place of beginning and being further known as all of Sublot No. 1 in Tinnerman Products, Inc Resubdivision to the survey dated February 1949, of Charles W. Root, Registered Professional Engineer and Surveyor, be the same more or less, but subject to all legal highways. Section 2. That one hundred percent (100%) of the Improvements are declared exempt from real property taxation for a period of thirty years, effective and commencing the first year the value of the Improvements are reflected on the tax duplicate; and that in no event shall the exemption period extend beyond 2052. The terms of the agreement are as follows: Project Name: Project Address: Developer: Project Manager: Ward/Councilperson: City Assistance: Tinnerman Lofts 2048 Fulton Avenue, Cleveland, OH 44113 Tinnerman Lofts LLC and/or designee Robin Brown 3-Kerry McCormack Non-School TIF Project Summary Tinnerman Lofts LLC, or its designee, (“Redeveloper”) an entity of The Dalad Group is proposing to develop the former Vista Print Building located at 2048 Fulton Avenue, Cleveland, OH 44113 (“Project Site”). In order to assist with project financing, the Developer has requested the City impose a 5709.41, 30-year, Non-School Tax Increment Financing (TIF). The TIF will support debt service related to the project and assist with the development of approximately 51 market rate and workforce housing apartment units. The building will feature solar panels and amenities including a fitness center, roof deck, reserved 2-story parking garage, bike storage and a pet-washing station. The total project investment is expected to exceed approximately $10 million. Company Background The Dalad Group (“Dalad”) is a full service real estate company based in Independence, Ohio. Founded in 1947, Dalad has been an innovative developer of office, industrial and retail space throughout the region. Dalad has completed numerous historic renovation projects within the City of Cleveland, including the Worthington Yards, Hoyt Block featuring the Blue Point Restaurant, the Hat Factory apartments on West 6th Street, 2320 Lofts located at 2320 Superior (serving CSU students) and the Creswell Building at 1220 Huron Road. Dalad also has a local portfolio of nearly two and a half million square feet of commercial real estate. The Dalad Group provides tenant representation and building management services through its brokerage division, Dalad Realty Company, as well as construction services through its general contracting arm, Dalad Construction Company. 3 Ordinance No. 31-2020 Proposed City Assistance The request to Cleveland City Council is to authorize the Director of Economic Development to enter into a non-school Tax Increment Finance (TIF) agreement with Tinnerman Lofts, LLC or its designee. This TIF agreement will be up to 30 years in length. The City will declare certain improvements with respect to the project to be a public purpose and exempt 100% of the improvements from real property taxes. Under the agreement, parcels acquired and re-conveyed to the developer will be subject to a TIF under Section 5709.41 of the Ohio Revised Code in consideration for the developer agreeing to make certain improvements to those parcels and making payments in lieu of taxes (PILOTs) equal to the taxes that would have been paid for those parcels but for the TIF. A portion of the PILOT will be paid to the Cleveland Municipal School District in the amount the District would have otherwise received but for the TIF. The TIF will be immediately effective on the residential after the expiration of the 15-year tax abatement for new residential construction. Economic Impact  Creation of 3 new full time jobs in the City of Cleveland  Project estimates $2,625 in new annual City tax revenue generated from residents and new employees City Requirements  Subject to Chapter 187: MBE/FBE/CSB requirements  Subject to Chapter 188: Fannie Lewis Cleveland Residential Employment Law  Subject to a Workforce Development Agreement for all new jobs  Subject to a Community Benefits Agreement Section 3. That, under Section 5709.41 of the Revised Code, Redeveloper, or the owners of the Improvements, shall make service payments for a period of thirty years in lieu of the exempt taxes to the Cuyahoga County Fiscal Officer or Treasurer, or designee; the payments shall be charged and collected in the same manner, and shall be in an amount not less than the taxes that would have been paid had the Improvements not been exempt from taxation. Section 4. That a portion of the service payments collected under this ordinance shall be distributed by the Cuyahoga County Fiscal Officer or Treasurer, or designee to the Treasurer of the District in the amount of the taxes that would have been payable to the District had the Improvements not been exempt from taxation. Section 5. That the Director of Economic Development is authorized to enter into an agreement or agreements with Redeveloper to provide for the exemption and service payments described in this ordinance, including agreements securing the 4 Ordinance No. 31-2020 payments described in this ordinance, which agreement or agreements shall contain those terms contained in this ordinance. Section 6. That when applicable under Section 5709.43 of the Revised Code, there is established an Urban Redevelopment Tax Increment Equivalent Fund into which shall be deposited Service Payments in Lieu of Taxes (“PILOTS” or “Service Payments”) that shall be used for financing the public purpose Improvements including project debt service, bond payments, and reimbursement of project construction costs, or for other economic development purposes as determined by the Director of Economic Development. Section 7. That it is found and determined that all formal actions of this Council concerning and relating to the passage of this ordinance were adopted in open meetings of this Council, and any of its committees that resulted in formal action were in meetings open to the public in compliance with the law. Section 8. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. SMa:nl 1-6-20 FOR: Director Ebersole 5 Ord. No. 31-2020 [File No. _31-2020-A] Council Members McCormack, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a Tax Increment Financing Agreement with Tinnerman Lofts, LLC, or its designee, to develop the former Vista Print building located at 2048 Fulton Avenue into apartment units and other amenities; to provide for payments to the Cleveland Metropolitan School District; and to declare certain improvements to real property to be a public purpose. READ FIRST TIME on JANUARY 6, 2020 REPORTS and referred to DIRECTORS of Economic Development, City Planning Commission, Finance, Law; COMMITTEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page REPORT after second Reading DEPARTMENT OF ECONOMIC DEVELOPMENT SUMMARY FOR THE MFILE ORDINANCE NO: in ?mar. Project Name: Tinnerman Lofts Proiect Address: 2048 Fulton Avenue, Cleveland, OH 44113 Developer: Tinnerman Lofts LLC and/or designee Project Manager: Robin Brown Ward/ Councilperson: 3-Kerry McCormack Citv Assistance: Non-School TIF Proiect Summarv Tinnerman Lofts LLC or designee (?Developer?) an entity of The Dalad Group is proposing to develop the former Vista Print Building located at 2048 Fulton Avenue, Cleveland, OH 44113 (?Project Site?). In order to assist with project financing, the Developer has requested the City impose a 5709.41, 30-year, Non- School Tax Increment Financing (TIF). The TIF will support debt service related to the project and assist with the development of approximately 51 market rate and workforce housing apartment units. The building will feature solar panels and amenities including a fitness center, roof deck, reserved 2~story parking garage, bike storage and a pet-washing station. The total project investment is expected to exceed approximately $10 million. Companv Background The Dalad Group (?Dalad?) is a full service real estate company based in Independence, Ohio. Founded in 1947, Dalad has been an innovative developer of Office, industrial and retail space throughout the region. Dalad has completed numerous historic renovation projects within the City of Cleveland, including the Worthington Yards, Hoyt Block featuring the Blue Point Restaurant, the Hat Factory apartments on West 6th Street, 2320 Lofts located at 2320 Superior (serving CSU students) and the Creswell Building at 1220 Huron Road. Dalad also has a local portfolio of nearly two and a half million square feet of commercial real estate. The Dalad Group provides tenant representation and building management services through its brokerage division, Dalad Realty Company, as well as construction services through its general contracting arm, Dalad Construction Company. Proposed Citv Assistance The request to Cleveland City Council is to authorize the Director of Economic Development to enter into a non~school Tax Increment Finance (TIF) agreement with Tinnerman Lofts, LLC or its designee. This TIF agreement will be up to 30 years in length. The City will declare certain improvements with respect to the project to be a public purpose and exempt 100% of the improvements from real property taxes. Under the agreement, parcels acquired and ice-conveyed to the developer will be subject to a TIF under Section 5709.41 of the Ohio Revised Code in consideration for the developer agreeing to make certain improvements to those parcels and making payments in lieu of taxes equal to the taxes that would have been paid for those parcels but for the TIF. A portion of the PILOT will be paid to the Cleveland Municipal School District in the amount the District would have otherwise received but for the TIF. The TIF will be immediately effective on the residential after the expiration of the 15-year tax abatement for new residential construction. Economic Impact 0 Creation of 3 new full time jobs in the City of Cleveland 0 Project estimates $2,625 in new annual City tax revenue generated from residents and new employees Citv Requirements 0 Subject to Chapter 187: requirements 0 Subject to Chapter 188: Fannie Lewis Cleveland Residential Employment Law 0 Subject to a Workforce Development Agreement for all new jobs a Subject to a Community Bene?ts Agreement Ohio City Connecting Cleveland 2020 Citywide Plan Land Use Diwsion at: Columbus '?m?mmk Ellen - . I'm In? Wake?uld-g: +4 p?ar' I 3 z' .. apple? E2 Meme {i i Q'Cmrd 5Auburn Proposed Land Use - Year 2020 SINGLE ITWO MIXED USE: DOWNTOWN TOWNHOUSE MULTI FAMILY MIXED USE: MIXED USE: 7 Fenwick" I walworl Cloud RETAIL COMMERCIAL SERVICES . LIGHT HEAVY .. - 'INSTITUTIONAL 7 9?7 . wgfam I $55 TRANSPORTATION I PUBLIC UTILITIES PARKING OHIO CITY . . WATER '5 if!? :80")ng yaw; 393% C OF C 125-174 Ordinance No. 88-2020 Council Members Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Directors of Finance and Economic Development to transfer funds from the General Fund to Fund 17 for the purpose of making grants for the Job Creation Incentive and Neighborhood Development Programs, and other loans and grants. WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Section 1. That the Directors of Finance and Economic Development are authorized to transfer $1,000,000 from Building and Permit fees collected and deposited into the General Fund to Fund No. 17 SF 652 for the purpose of making grants for the Job Creation Incentive Program created under the authority of Ordinance No. 1104-13, passed September 23, 2013. Section 2. That the Directors of Finance and Economic Development are authorized to transfer $500,000 from Building and Permit fees collected and deposited into the General Fund to Fund No. 17 SF 634 for the purpose of making grants for the Neighborhood Development Program created under the authority of Ordinance No. 2567-A-88, passed January 30, 1989, as amended by Ordinance No. 1336-89, passed June 5, 1989, Ordinance No. 1743-90, passed July 23, 1990, Ordinance No. 1671-91, passed September 30, 1991, Ordinance No. 129793, passed June 14, 1993, Ordinance No. 299-94, passed March 28, 1994, Ordinance No. 644-11, passed May 23, 2011, and Ordinance No. 115-12, passed March 22, 2012, and to deposit repayments into Fund No. 17 SF 006. Section 3. That the Directors of Finance and Economic Development are authorized to transfer $1,500,000 from Building and Permit fees collected and deposited into the General Fund to Fund No. 17 SF 006 for the purpose of making economic development grants and loans under the authority of Ordinance No. 90-10, passed February 8, 2010, and to deposit repayments into Fund No. 17 SF 006. (RQS 9501, RL 2020-1) Section 4. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. RB:nl 1-13-20 FOR: Directors Dumas and Ebersole Ord. No. 88-2020 REPORT after second Reading Council Members Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Directors of Finance and Economic Development to transfer funds from the General Fund to Fund 17 for the purpose of making grants for the Job Creation Incentive and Neighborhood Development Programs, and other loans and grants. READ FIRST TIME on JANUARY 13, 2020 REPORTS and referred to DIRECTORS of Economic Development, Finance, Law; COMMITEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page EXECUTIVE SUMMARY Ordinance No. 88-2020 SUMMARY OF ORDINANCE This ordinance authorizes the transfer of $1,000,000 to the Job Creation Incentive Program (JCIP), $500,000 to the Neighborhood Development Program (NDP), and $1,500,000 for the use of the Department of Economic Development for the making of loans and grants under $250,000 from the General Fund. JUSTIFICATION The Ordinance provides for funding form the general fund to support the programmatic efforts of the Department of Economic Development. Historically, the Department has relied on two flexible funding sour es for the aki g of loa s a d gra ts, repa e ts fro UDAG Loa s ade i the ’s a d s and repayments from loans made through an allocation of unrestricted NDIF funds in the 1990s. These resources are very flexible, but the repayment streams are beginning to slow. Historically, the Department commits $3,000,000 annually for various development uses from these resources. This commitment from the general fund should be sufficient to over the Depart e t’s regular business needs for this year and stre gthe the Depart e t’s fi a ial positio i future ears. I additio , this o it e t a le gthe the lifespa of the Depart e t’s e isti g highl fle i le repayment streams and provides flexibility to drive investments in new directions. This ordinance provides for the transfer of $3,000,000 to fund various Economic Development programs traditionally funded through these resources. C OF C 125-174 Ordinance No. 109-2020 AN EMERGENCY ORDINANCE Approving the report of the Assessment Equalization Board on objections concerning Council Members McCormack, Brancatelli estimated assessments with respect to the and Kelley (by departmental request) continuation and expansion of the Ohio City Cleveland Business Improvement District and the comprehensive services plan for safety, maintenance and other services to be provided for the District; determining to proceed with the plan to provide public services within the District; adopting the assessments; levying the assessments; and authorizing the City of Cleveland to enter into an agreement with the Ohio City Improvement Corporation. WHEREAS, under Resolution No. 1281-2019, adopted November 11, 2019, the Assessment Equalization Board (the “Board”) was appointed to hear and determine all objections concerning the estimated assessments under Resolution No. 711-2019, adopted August 21, 2019 (the “Resolution of Necessity”), to provide for public services benefitting the Ohio City - Cleveland Business Improvement District (the “District”); and WHEREAS, the Board has filed its report with this Council as to its determination of the objections; and WHEREAS, this Council deems the report proper in all respects; and WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Section 1. That the report of the Board, appointed under Resolution No. 1281- 2019, adopted November 11, 2019, is approved and placed in File No. _109-2020-A, along with the final assessments for the District, as equalized by the Board. Section 2. That it is determined to proceed to provide for the plan for public services benefitting the District (collectively, “District Services”), as established in the Resolution of Necessity. Section 3. That the District Services shall be performed under the provisions of the Resolution of Necessity, and consistent with the plans, specifications, profiles, and assessments approved and filed in the office of the Clerk of Council. Section 4. That judicial inquiry into all claims for damages resulting from the District Services filed under law shall occur after completion of the District Services. Ordinance No. 109-2020 Section 5. That the cost of the District Services to be assessed against benefited property shall be assessed in the amount, manner and number of installments as provided for in the Resolution of Necessity, as equalized by the Board. Section 6. That the final assessments, as equalized by the Board, for the cost of the District Services, placed in the file mentioned above and aggregating $3,008,337.66 are adopted and confirmed as final assessments. Section 7. That the final assessments shall be assessed and levied on the lots and lands benefited and to be charged therewith in the District in proportion to the benefits as described in the Resolution of Necessity. Section 8. That it is determined that the assessments do not exceed the special benefits resulting from the District Services, and do not exceed any statutory limitation. Section 9. That the final assessments which have been filed with the Clerk of Council shall remain open to public inspection. Section 10. That the first year installments against each lot and parcel of land shall be billed by and paid to the City of Cleveland’s Division of Assessments and Licenses. All first year assessments which have not been paid by the specified due date, as well as the subsequent annual assessments, shall be certified by the Commissioner of the Division of Assessments and Licenses to the County Fiscal Officer on or before the certification deadline for the appropriate assessment years, to be placed on the tax duplicate and collected the same as other taxes, as provided by law. Section 11. That the Clerk of Council is directed to cause a certified copy of this ordinance to be filed with the County Fiscal Officer within fifteen (15) days after the passage of this ordinance, or as otherwise required by Section 319.61 of the Revised Code. Section 12. That the Clerk of Council is directed to cause notice of the levy of the assessments to be filed with the County Fiscal Officer within twenty (20) days following the passage of this ordinance, or as otherwise required by Section 319.61 of the Revised Code. 2 Ordinance No. 109-2020 Section 13. That the Clerk of Council is directed to cause a notice of the passage of this ordinance to be published once in a newspaper of general circulation in this City. Section 14. That it is found and determined that all formal actions of this Council concerning and relating to the adoption of this ordinance were conducted in an open meeting of this Council, and that all deliberations of this Council and any of its committees that resulted in such formal action, were conducted in meetings open to the public, in compliance with all legal requirements. Section 15. That the Directors of City Planning and Finance are authorized, in their discretion, to enter into a contract with the Ohio City Improvement Corporation setting forth the terms under which the City will levy an assessment for the District and the use of the proceeds of the assessments levied herein. Section 16. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. MC:nl 1-27-20 FOR: Director Collier 3 Ord. No. 109-2020 [File No. _109-2020-A] Council Members McCormack, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Approving the report of the Assessment Equalization Board on objections concerning estimated assessments with respect to the continuation and expansion of the Ohio City Cleveland Business Improvement District and the comprehensive services plan for safety, maintenance and other services to be provided for the District; determining to proceed with the plan to provide public services within the District; adopting the assessments; levying the assessments; and authorizing the City of Cleveland to enter into an agreement with the Ohio City Improvement Corporation. READ FIRST TIME on JANUARY 27, 2020 REPORTS and referred to DIRECTORS of City Planning Commission, Finance, Law; COMMITTEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page REPORT after second Reading Summary Ordinance No. 109-2019 An assessment equalization board met on Tuesday, November 26, 2019, to hear the objections to the estimated assessments with respect to the continuation and expansion of the Ohio City – Cleveland Business Improvement District. The board determined that the assessments were correct as calculated by the City according to the District’s Plan with the exception of the following, which the Board equalized as described below: a. Parcel No. 003-28-080 (Michael H. Flickinger): Determined that the calculation of the assessment amount is technically correct because the 15.42 feet of frontage in question does border a public right-of-way, however the location of the frontage and the character of the public right-of-way are such that the inclusion of that 15.42 feet of frontage in the calculation is not consistent with the spirit of the formula and, therefore, only the 55.58 foot frontage along West 28th Street should be included in the formula for this parcel. Parcel No. 003-28-080: Total frontage changed from 71.00 to 55.58. b. Parcel Nos. 007-08-009 and 007-09-001 (West Side Catholic Center): Determined that the initial inclusion of the frontage along West 32nd Street was at the request of the property owner and not part of the original District footprint. As such, the owner’s request that the side frontage instead be excluded should be granted, with the remainder of the owner’s frontage appropriately included in the District expansion in the same manner as other District property. Parcel No. 007-08-009: Total frontage changed from 168.80 to 40.00. Parcel No. 007-09-001: Total frontage changed from 205.00 to 66.00. 70953-1 1 C OF C 125-174 Ordinance No. 119-2020 Council Members Griffin, Johnson, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a grant agreement with Burten Bell Call Inc., or its designee, to provide economic development assistance to partially finance costs associated with acquisition, stabilization, and holding commercial properties along the Buckeye Road corridor between East 116th and East 130th Streets. WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Section 1. That the Director of Economic Development is authorized to enter into a grant agreement with Burten Bell Carr Inc., or its designee (“Burten Bell”), to provide economic development assistance to partially finance costs associated with acquisition, stabilization, and holding commercial properties along the Buckeye Road corridor between East 116th and East 130th Streets. The agreement shall also contain a provision that, if Burten Bell disposes of any properties acquired under this agreement, any proceeds due the City shall be deposited into Fund 17 to be used for future acquisitions and acquisition-related activities in support of the Neighborhood Transformation Activities. Section 2. That the agreement and other appropriate documents needed to complete the transaction authorized by this legislation shall be prepared by the Director of Law. Section 3. That the contract authorized in this legislation will require the recipients of financial assistance to work with, and/or cause their tenants to work with, The Workforce Investment Board for Workforce Area No. 3 to identify and solicit qualified candidates for job opportunities related to the City’s contracts, and place special emphasis on the hard to employ, including but not limited to the disabled and persons who have been convicted of or have pled guilty to a criminal offense, unless the criminal conviction or circumstances relate to the duties for the particular job sought. Ordinance No. 119-2020 Section 4. That the costs of the grant shall not exceed an amount of $1,200,000 and shall be paid from Fund No. 01-9997-6985, Request No. RQS 9501, RL 2020-4. Section 5. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. RB:nl 1-27-20 FOR: Director Ebersole 2 Ord. No. 119-2020 REPORT after second Reading Council Members Griffin, Johnson, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a grant agreement with Burten Bell Call Inc., or its designee, to provide economic development assistance to partially finance costs associated with acquisition, stabilization, and holding commercial properties along the Buckeye Road corridor between East 116th and East 130th Streets. READ FIRST TIME on JANUARY 27, 2020 REPORTS and referred to DIRECTORS of Economic Development, Finance, Law; COMMITTEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page DEPARTMENT OF ECONOMIC DEVELOPMENT EXECUTIVE ORDINANCE NO: i=5 Err-i Project: Buckeye Road Commercial Corridor Stabilization Grantee: Burten Bell Carr lnc. Project Location: Buckeye Road between E. 116th and E. 130th Streets Project Manager: Briana Butler Ward Councilperson: Ward 6 Blaine Grif?n, Ward 4 Kenneth Johnson Grant Amount: $1,200,000 Purpose of Financial Assistance The purpose of this $1,200,000 Economic Development Grant is to assist Burten Bell Carr Inc. (BBC) in stabilizing the Buckeye Road commercial corridor between E. 116th and E. 130th streets. As part of the Mayor?s Neighborhood Transformation Initiative, BBC will work with the City to acquire commercial properties, stabilize them, and bring them to market. The grant agreement will cover acquisition, holding, and stabilization costs of commercial properties along Buckeye Road between E. 116th and E. 130th. Proiect Description Buckeye-Woodhill is one of the target neighborhoods for the Mayor?s Neighborhood Transformation Initiative (NTI). Buckeye Road has a many commercial buildings that can be restored while still keeping the historical fabric of the neighborhood. Due to their history as a CDC, and interest in helping to develop this area, BBC is a good partner for As such, the Departments of Economic Development, Community Development, Planning, and Building and Housing have been working with BBC on a strategy to redevelop the Buckeye Road corridor and bring commercial storefronts and other businesses to the district. Reactivating this commercial corridor will serve as a job catalyst for the area and bring much needed goods and services for the residents. Burten Bell Carr will work to acquire approximately 30 vacant, abandoned, and some privately-owned properties along Buckeye Road. BBC will work through the tax foreclosure process to acquire the properties. They will clear the titles and do a complete assessment to stabilize the properties which can include roof and other structural repairs as well as weatherization. Lastly, BBC will complete regular lawn and building maintenance on the properties. BBC will work with the City and private developers to bring the properties to market and further develop the properties for their highest and best uses. Any proceeds from repayments of this grant from BBC to the City shall be used for eligible Economic Development projects through the Neighborhood Transformation Initiative. THERE IS NO LEGAL OBJECTION TO THIS LEGISLATION IF AMENDED AS FOLLOWS: 1. In the title, line 4, strike “Call” and insert “Carr”. Date: _______ (Signed): _______________________________________ Ronda Curtis Chief Corporate Counsel Ord. No. 119-2020 C OF C 125-174 Ordinance No. 158-2020 AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into contract with Harbor Council Members McCormack, Brancatelli Bay Real Estate Advisors, LLC, or its designee, to and Kelley (by departmental request) provide economic development assistance to partially finance the development of the Market Square project located at the corner of West 25th Street and Lorain Avenue and other associated costs necessary to redevelop the property. WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Section 1. That the Director of Economic Development is authorized to enter into contract with Harbor Bay Real Estate Advisors, LLC, or its designee, to provide economic development assistance to partially finance the development of the Market Square project located at the corner of West 25th Street and Lorain Avenue and other associated costs necessary to redevelop the property. Section 2. That the terms of the loan shall be according to the terms set forth in the Summary contained in File No. 158-2020-A, made a part of this ordinance as if fully rewritten, as presented to the Finance Committee of this Council at the public hearing on this legislation, and are approved in all respects and shall not be changed without additional legislative authority. Section 3. That the costs of the contract shall not exceed Two Million Dollars ($2,000,000), and shall be paid from Fund No. 17 SF 008, which funds are appropriated for this purpose, RQS 9501, RL 2020-14. Section 4. That the Director of Economic Development is authorized to accept such collateral as the director determines is sufficient in order to secure repayment of the loan. Any loan agreement, security instrument, or other document shall be prepared and approved by the Director of Law. Section 5. That the Director of Economic Development is authorized to accept monies in repayment of the loan and to deposit the monies in Fund No. 17 SF 006. Section 6. That the Director of Economic Development is authorized to charge and accept fees in an amount not to exceed the maximum allowable fees under federal Ordinance No. 158-2020 regulations and the fees are appropriated to cover costs incurred in the preparation of the loan application, closing and servicing of the loan. The fees shall be deposited to and expended from Fund No. 17 SF 305, Loan Fees Fund. Section 7. That the contract and other appropriate documents needed to complete the transaction authorized by this legislation shall be prepared by the Director of Law. Section 8. The contract authorized in this legislation will require the recipients of financial assistance to work with, and/or cause their tenants to work with Ohio Means Jobs Cuyahoga County and City of Cleveland to identify and solicit qualified candidates for job opportunities related to the City’s contracts, and place special emphasis on the hard to employ, including but not limited to the disabled and persons who have been convicted of or have pled guilty to a criminal offense, unless the criminal conviction or related circumstances relate to the duties for the particular job sought. Section 9. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. SM:nl 2-3-20 FOR: Director Ebersole 2 Ord. No. 158-2020 [File No. 158-2020-A] Council Members McCormack, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into contract with Harbor Bay Real Estate Advisors, LLC, or its designee, to provide economic development assistance to partially finance the development of the Market Square project located at the corner of West 25th Street and Lorain Avenue and other associated costs necessary to redevelop the property. READ FIRST TIME on FEBRUARY 3, 2020 and referred to DIRECTORS of Economic Development, Finance, Law; COMMITTEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page REPORTS REPORT after second Reading -- City of A EV Built by Industry. Inspired by Innovation. DEVELOPMENT DEPARTMENT OF ECONOMIC DEVELOPMENT SUMMARY FOR THE LEGISLATIVE FILE ORDINANCE NO: 35% 2010 Project Name: Market Square Recipient: Harbor Bay Real Estate Advisers, and/or Designee Project Site: Corner of West 25th Street and Lorain Avenue Proiect Manager: Richard Barge WardlCouncilperson: 3 McCormack Companv Backmound Harbor Bay Real Estate Advisers is a leading real estate development and investment firm, renowned for its relationship-focused, honest approach in creating valuable real estate. Harbor Bay is based on a foundation of great people, high energy and sound discipline. At its core, Harbor Bay strives to build superior communities through well- developed, well- positioned, well-managed real estate. Above all, Harbor Bay prides itself on consistently exhibiting a partnership approach when working with its clients and customers in the evaluation and Optimization of real estate. Clly of Cleveland Department of Economlc Development . Mayor Frank G. jacksen so: Ave. Room 210 Cleveland. Ohio-141 l-l - phone 1165611105 Harbor Bay 8: its family affiliates have been around since 1856, comprising multiple generations of real estate development, investment and management. Together, they have developed in excess of two billion dollars in real estate across a broad range of product types including multi?family, industrial, office, retail, student senior living. Harbor Bay?s trademark is transformational developments with high impacts to communities. Project Summary Harbor Bay, through its subsidiary Ohio City Legacy LLC is planning a $135 million apartment-and-office complex in Ohio City?s Market Square. The Cleveland property was purchased for $5.85 million, sold to Chicago?based developer Harbor Bay Real Estate Advisors. The Project will encompass an eight (8) story building comprising of approximately 480,000 total square feet, including 293 residential apartments, 40,000 square feet of retail, event space, and one acre of green space (the ?Market Square Project?). A future phase is also considered with a speculative office use. The location on the corner of W. 25th Street and Lorain Avenue is steps from the iconic West Side Market and the Red Line Rapid station. The oneastory plaza that is currently there will be razed. The 11 tenants have all already agreed to buyouts and many are looking to relocate their businesses Within Ohio City. The project is using the Port Authority?s Capital Lease program for construction cost savings and thus will be subject to the Port?s Prevailing Wage requirement. The Market Square Project will be predominately constructed using mass timber. Mass timber is the construction of a building using either solid or engineered wood, such as cross- laminated timber, nail-laminated timber, glueslaminated timber, etc., for the primary load- bearing structures. The use of mass timber is a new construction method in the State of Ohio. However, mass timber has been widely used throughout the world, most notably in Canada, Europe and Australia. In addition to the use of mass timber, the Market Square Project will utilize sustainable and energy efficient materials, equipment, and design processes, including but not limited to, LEED or comparable green building certification, interior and exterior LED lighting, energy~efficient HVAC systems, and low flow ?ush and flow fixtures. It is estimated that the Market Square Project will lead to the creation of 735 direct construction jobs with over $46 million in payroll. Proposed Citv Assistance $2,000,000 loan Economic Impact 0 Approximately 300 residential units 0 Anticipated over 700 construction jobs a 10 new FTE ($208,000 estimated new payroll) City of Cleveland Department of Economic Development - Mayor Frank G. 601 Lake'suie Ave. Room 210 Cleveland. Ohio $11 1-: - phone Ila 564.1356 0 wvnv.reihinkclewlmadorg Citv Requirements - 187 . 188 Fannie Lewis Law - Workforce Development Agreement 0 Community Benefits Agreement Subject to the Port Authority?s Prevailing Wage requirement per the Capital Lease program City of Cleveland Department of Economic Development - Mayor Frank 60': Lakemdc Aw, Room 1H) - Cl-?weiand. Ohm .m It: - phone 2 weenie-5 vamclhinkcFevela?dnfg C OF C 125-174 Ordinance No. 161-2020 Council Members McCormack, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a Tax Increment Financing Agreement with Harbor Bay Real Estate Advisors, LLC, or its designee, to partially finance the public purpose improvements including project debt service for project site located at West 25th Street and Lorain Avenue; to provide for payments to the Cleveland Metropolitan School District; and to declare certain improvements to real property to be a public purpose. WHEREAS, under Section 5709.41 of the Revised Code, improvements to real property may be declared to be a public purpose where fee title to the real property was, at one time, held by the City of Cleveland and the real property is then leased or conveyed by the City; and WHEREAS, under Ordinance No. 1539-2019, passed January 13, 2020, the City has entered into the chain of title for the Property which is more particularly described in this ordinance (the “Real Property’) pursuant to the requirements of Section 5709.41 of the Revised Code prior to the passage of this ordinance; and WHEREAS, the Real Property is to be developed in accordance with the Cleveland 2020 Citywide Plan, a copy of which is placed in File No. _161 -2020-A; and WHEREAS, under Section 5709.41 of the Revised Code , the improvements declared to be a public purpose may be exempt from real property taxation; and WHEREAS, under Section 5709.41 of the Revised Code, the owners of the improvements may be required to make annual service payments in lieu of taxes that would have been paid had the improvement not been exempt; and WHEREAS, under Section 5709.41 of the Revised Code, the exemption may exceed 75% of the improvements for up to 30 years when a portion of the service payments so collected are distributed to the Cleveland Metropolitan School District (“District”) in an amount equal to the amount the District would have received had the improvement not been exempt; and WHEREAS, the District has been notified of the intent to enter into the agreement authorized by this ordinance in compliance with Sections 5709.41(C)(4) and 5709.83 of the Revised Code; and WHEREAS, this ordinance constitutes an emergency measure providing for the usual daily operation of a municipal department; now, therefore, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF CLEVELAND: Ordinance No. 161-2020 Section 1. That the improvements to be constructed by Harbor Bay Real Estate Advisors, LLC, or its designee, (“Redeveloper”), are declared to be a public purpose for purposes of Section 5709.41 of the Revised Code (the “Improvements”). The Real Property is more fully described as follows: Lot 1 Situated in the City of Cleveland, County of Cuyahoga, State of Ohio, and being part of original Brooklyn Township Lot Number 69, being part of a parcel conveyed to Ohio City Legacy LLC as recorded in AFN 201901150661 as shown on the Assembly Plat as recorded in Plat Volume 243, Page 85, also being part of a parcel of land as shown on the partial vacation of Gehring Ave. as recorded in Plat Volume ________, Page __________being further bounded and described as follows: Beginning at a drill hole set at the intersection of the south right of way line of Lorain Avenue (102 feet wide) and the east right of way line of West 25th Street (82.50 feet wide), said drill hole being the POINT OF BEGINNING of the parcel of land hereinafter described: 1. Thence on the south right of way line of said Lorain Avenue, N 58° 34' 57" E for a distance of 353.26 feet to a drill hole set on the west right of way line of Gehring Avenue (52 feet wide); 2. Thence on the west right of way line of said Gehring Avenue, S 31° 25' 03" E for a distance of 4.73 feet to a drill hole set; 3. Thence on the west right of way line of said Gehring Avenue, S 0° 37' 09" E for a distance of 449.70 feet to a rebar set; 4. Thence on a new division line, S 58° 16' 39" W for a distance of 120.92 feet to a rebar set on the east right of way line of said West 25th Street; 5. Thence on the east right of way line of said West 25th Street, N 31° 43' 21" W for a distance of 391.67 feet to the Point of Beginning, containing 2.1417 acres (93,290 sq.ft.) of land, more or less, and subject to all easements, restrictions and covenants of record. The above description prepared by Steven L. Mullaney, P.S. 7900 of Glaus, Pyle, Schomer, Burns & DeHaven, Inc., dba GPD Group, and based on a field survey made in January of 2019. All bearings referred to herein, are relative to grid north of the Ohio State Plane Coordinate System, North Zone, NAD83 (2011), as determined from GNSS measurements tied to the Ohio Department of Transportation’s VRS system. All rebar set are 5/8 inch diameter by 30 inch long rebar with cap marked “GPD” Section 2. That one hundred percent (100%) of the Improvements are declared exempt from real property taxation for a period of thirty years, effective and commencing the first year the value of the Improvements are reflected on the tax duplicate; and that in no event shall the exemption period extend beyond 2051. The terms of the agreement are as follows: 2 Ordinance No. 161-2020 Project Name: Recipient: Project Site: Project Manager: Ward/Councilperson: Market Square Harbor Bay Real Estate Advisors, and/or Designee Corner of West 25th Street and Lorain Avenue Richard Barga 3/McCormack Company Background Harbor Bay Real Estate Advisors is a leading real estate development and investment firm, renowned for its relationship-focused, honest approach in creating valuable real estate. Harbor Bay is based on a foundation of great people, high energy and sound discipline. At its core, Harbor Bay strives to build superior communities through well- developed, well-positioned, well-managed real estate. Above all, Harbor Bay prides itself on consistently exhibiting a partnership approach when working with its clients and customers in the evaluation and optimization of real estate. Harbor Bay & its family affiliates have been around since 1856, comprising multiple generations of real estate development, investment and management. Together, they have developed in excess of two billion dollars in real estate across a broad range of product types including multifamily, industrial, office, retail, student & senior living. Harbor Bay’s trademark is transformational developments with high impacts to communities. Project Summary Harbor Bay, through its subsidiary Ohio City Legacy LLC is planning a $135 million apartmentand-office complex in Ohio City’s Market Square. The Cleveland property was purchased for $5.85 million, sold to Chicago-based developer Harbor Bay Real Estate Advisors. The Project will encompass an eight (8) story building comprising of approximately 480,000 total square feet, including 293 residential apartments, 40,000 square feet of retail, event space, and one acre of green space (the “Market Square Project”). A future phase is also considered with a speculative office use. The location on the corner of W. 25th Street and Lorain Avenue is steps from the iconic West Side Market and the Red Line Rapid station. The one-story plaza that is currently there will be razed. The 11 tenants have all already agreed to buyouts and many are looking to relocate their businesses within Ohio City. The project is using the Port Authority’s Capital Lease program for construction cost savings and thus will be subject to the Port’s Prevailing Wage requirement. The Market Square Project will be predominately constructed using mass timber. Mass timber is the construction of a building using either solid or engineered wood, such as cross-laminated timber, nail-laminated timber, glue-laminated timber, etc., for the primary load-bearing structures. The use of mass timber is a new construction method in the State of Ohio. However, 3 Ordinance No. 161-2020 mass timber has been widely used throughout the world, most notably in Canada, Europe and Australia. In addition to the use of mass timber, the Market Square Project will utilize sustainable and energy efficient materials, equipment, and design processes, including but not limited to, LEED or comparable green building certification, interior and exterior LED lighting, energy-efficient HVAC systems, and low flow flush and flow fixtures. It is estimated that the Market Square Project will lead to the creation of 735 direct construction jobs with over $46 million in payroll. Proposed City Assistance Beyond the construction financing, the City is being asked to assist with a 30 year non-school TIF to pay debt service for the project. Economic Impact  Approximately 300 residential units  Anticipated over 700 construction jobs  10 new FTE ($208,000 estimated new payroll) City Requirements  Chpt 187 – MBE/FBE/CBS  Chpt 188 – Fannie Lewis Law  Workforce Development Agreement  Community Benefits Agreement  Subject to the Port Authority’s Prevailing Wage requirement per the Capital Lease program Section 3. That, under Section 5709.41 of the Revised Code, Redeveloper, or the owners of the Improvements, shall make service payments for a period of thirty years in lieu of the exempt taxes to the Cuyahoga County Fiscal Officer or Treasurer, or designee; the payments shall be charged and collected in the same manner, and shall be in an amount not less than the taxes that would have been paid had the Improvements not been exempt from taxation. Section 4. That a portion of the service payments collected under this ordinance shall be distributed by the Cuyahoga County Fiscal Officer or Treasurer, or designee to the Treasurer of the District in the amount of the taxes that would have been payable to the District had the Improvements not been exempt from taxation. Section 5. That the Director of Economic Development is authorized to enter into an agreement or agreements with Redeveloper to provide for the exemption and service payments described in this ordinance, including agreements securing the payments described in this ordinance, which agreement or agreements shall contain those terms contained in this ordinance. Section 6. That when applicable under Section 5709.43 of the Revised Code, there is established an Urban Redevelopment Tax Increment Equivalent Fund into 4 Ordinance No. 161-2020 which shall be deposited Service Payments in Lieu of Taxes (“PILOTS” or “Service Payments”) that shall be used for financing the public purpose Improvements including project debt service, bond payments, and reimbursement of project construction costs, or for other economic development purposes as determined by the Director of Economic Development. Section 7. That it is found and determined that all formal actions of this Council concerning and relating to the passage of this ordinance were adopted in open meetings of this Council, and any of its committees that resulted in formal action were in meetings open to the public in compliance with the law. Section 8. That this ordinance is declared to be an emergency measure and, provided it receives the affirmative vote of two-thirds of all the members elected to Council, it shall take effect and be in force immediately upon its passage and approval by the Mayor; otherwise it shall take effect and be in force from and after the earliest period allowed by law. SMa:nl 2-3-20 FOR: Director Ebersole 5 Ord. No. 161-2020 [File No. 161-2020-A] Council Members McCormack, Brancatelli and Kelley (by departmental request) AN EMERGENCY ORDINANCE Authorizing the Director of Economic Development to enter into a Tax Increment Financing Agreement with Harbor Bay Real Estate Advisors, LLC, or its designee, to partially finance the public purpose improvements including project debt service for project site located at West 25th Street and Lorain Avenue; to provide for payments to the Cleveland Metropolitan School District; and to declare certain improvements to real property to be a public purpose. READ FIRST TIME on FEBRUARY 3, 2020 REPORTS and referred to DIRECTORS of Economic Development, City Planning Commission, Finance, Law; COMMITTEES on Development Planning and Sustainability, Finance CITY CLERK READ SECOND TIME CITY CLERK READ THIRD TIME PRESIDENT CITY CLERK APPROVED MAYOR Recorded Vol. 107 Published in the City Record Page REPORT after second Reading City of A LEVE . Built by Industry. Inspired by Innovation. ECONOMIC DEVELOPMENT DEPARTMENT OF ECONOMIC DEVELOPMENT SUMMARY FOR THE FILE ORDINANCE NO: 1w? 202s Project Name: Market Square Recigient: Harbor Bay Real Estate Advisers, and/or Designee Project Site: Corner of West 25th Street and Lorain Avenue Proiect Manager: Richard Barga Ward/Councilperson: 3 - McCormack Companv Background Harbor Bay Real Estate Advisers is a leading real estate development and investment firm, renowned for its relationship-focused, honest approach in creating valuable real estate. Harbor Bay is based on a foundation of great people, high energy and sound discipline. At its core, Harbor Bay strives to build superior communities through well? developed, well- positioned, well?managed real estate. Above all, Harbor Bay prides itself on consistently exhibiting a partnership approach when working with its clients and customers in the evaluation and optimization of real estate. Clly of Cleveland Department of Economic Development . Mayor Frank G. {Sol mil-made Arc, Ruorn 210 - Cleveland, Ohio It. - phone . urn-nunreihinkclevelandorg Harbor Bay 8: its family affiliates have been around since 1856, comprising multiple generations of real estate development, investment and management. Together, they have developed in excess of two billion dollars in real estate across a broad range of product types including multi-family, industrial, office, retail, student senior living. Harbor Bay?s trademark is transformational developments with high impacts to communities. Proiect Summary Harbor Bay, through its subsidiary Ohio City Legacy LLC is planning a $135 million apartment-and?office complex in Ohio City?s Market Square. The Cleveland property was purchased for $5.85 million, sold to Chicago?based developer Harbor Bay Real Estate Advisors. The Project will encompass an eight (8) story building comprising of approximately 480,000 total square feet, including 293 residential apartments, 40,000 square feet of retail, event space, and one acre of green space (the ?Market Square Project?). A future phase is also considered with a speculative office use. The location on the corner of W. 25th Street and Lorain Avenue is steps from the iconic West Side Market and the Red Line Rapid station. The one-story plaza that is currently there will be razed. The 11 tenants have all already agreed to buyouts and many are looking to relocate their businesses within Ohio City. The project is using the Port Authority?s Capital Lease program for construction cost savings and thus will be subject to the Ports Prevailing Wage requirement. The Market Square Project will be predominately constructed using mass timber. Mass timber is the construction of a building using either solid or engineered wood, such as cross- laminated timber, nail~laminated timber, glue-laminated timber, etc., for the primary load- bearing structures. The use of mass timber is a new construction method in the State of Ohio. However, mass timber has been widely used throughout the world, most notably in Canada, Europe and Australia. In addition to the use of mass timber, the Market Square Project will utilize sustainable and energy efficient materials, equipment, and design processes, including but not limited to, LEED or comparable green building certification, interior and exterior LED lighting, energy?efficient HVAC systems, and low flow flush and flow fixtures. It is estimated that the Market Square Project will lead to the creation of 735 direct construction jobs with over $46 million in payroll. Proposed City Assistance Beyond the construction financing, the City is being asked to assist with a 30 year non? school TIF to pay debt service for the project. Economic Impact 0 Approximately 300 residential units - Anticipated over 700 construction jobs 0 10 new FTE ($208,000 estimated new payroll) City of Cleveland Department of Economic Development Mayor Frank G.ja:ksun 601 Five. Room 210 - Ctew?ond. Ohio ?31 1-1 - phone 216 can. 2-106 - Citv Requirements 0 187 - 188 Fannie Lewis Law 0 Workforce Development Agreement - Community Benefits Agreement Subject to the Port Authority?s Prevailing Wage requirement per the Capital Lease program (Ity of Cieveland Department of Economlc Development - Mayor Frank 6. Jackson 50?. Ave. Room 210 - Cleveland. Ohio 4.: i 5.: - phone 215.663; 2-106 mg Ema?wihwuauu. 2032 maw??mggs?m? 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